Ag Policy Blog

Corn Ethanol Target of Keystone Amendment

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Until Friday the U.S. ethanol industry took virtually no interest in the debate about whether the Keystone XL pipeline should be built across a number of Northern Plains states including Nebraska.

As the amendments process gets fired up in the U.S. Senate ahead of a vote on legislation to build the pipeline, however, one particular amendment caught the attention of the ethanol industry.

Sens. Dianne Feinstein, D-Calif., Pat Toomey, R-Pa., and Jeff Flake, R-Ariz., are attempting to attach an amendment to the Keystone measure that would remove corn ethanol from the Renewable Fuel Standard. It is believed potential legislation to either reform or eliminate the RFS altogether could come before Congress this year.

As part of the amendment the senators make a number of claims about the corn-ethanol industry.

Bob Dinneen, president and chief executive officer of the Renewable Fuels Association, said in a statement Friday the amendment is without merit.

"The Feinstein/Toomey amendment is founded upon a false premise," Dinneen said. "The sponsors claim the so-called corn ethanol mandate drives up the price of corn, food, and gas. The fact of the matter is that corn is less expensive today than when the RFS was passed in 2007. There is simply no truth to the notion that ethanol has driven up the price of food. In fact, the UN concluded that food prices are driven more by the price of energy than the cost of commodities. To that point, ethanol has been less expensive than gas for the better part of the past four years and has helped reduce consumer pain at the pump.

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"This amendment is an unnecessary solution to an imaginary problem. If approved, it would set our nation's energy, economic, and climate agenda back decades."

Tom Buis, chief executive officer of Growth Energy said in a statement that senators are trying to accomplish something in the amendment process they were unable to do through previous legislation.

"This legislation is incredibly shortsighted," Buis said. "Nearly identical legislation has been introduced in the past and has always failed to gain any traction since a majority of senators understand the importance of homegrown American renewable fuels. This amendment would eviscerate the RFS -- the most successful energy policy enacted in the last 40 years. It will continue to keep us addicted to foreign oil and more than anything, it seems like this legislation is appeasing the wishes of big oil and big food.

"Additionally, this legislation is based on false, misleading information. To blame ethanol for an increase in the price of food may make for good rhetoric, but it is completely devoid of any facts to back it up. Corn ethanol is not the cause of high prices; it is the price of oil."

Buis said even the World Bank pointed out that crude oil prices are responsible for more than 50% of the increase in food prices since 2004.

"Countess studies have shown that oil prices, Wall Street speculators and the high costs of manufacturing, packaging and transportation are the true culprits driving up food prices," Buis said. "Furthermore, 2014 yielded a record corn crop and the price of corn dropped precipitously throughout the harvest, even as food costs increased. The authors of this legislation fail to understand the actual process of how ethanol is produced. Only the starch is removed, while all of the valuable components – the fiber, oil and protein is returned to the food chain in the form of a high protein animal feed."

Buis pointed to corn ethanol's "environmental benefits" outlined in an Argonne National Laboratory study that found ethanol reduces greenhouse gas emissions by an average of 34% compared to gasoline. "Advanced biofuels like cellulosic ethanol have the potential to reduce greenhouse gas emissions by over 100 percent in comparison to gasoline," he said.

"...It appears to me, this legislation is nothing more than a concession to demands of big oil and big food, who care more about their own bottom line, than the American consumer," Buis said. "Furthermore, this is a slap in the face to consumers who deserve a choice and savings when they go to fill up at the pump."

Feinstein said in a statement the amendment presents an opportunity to focus the RFS on advanced biofuels.

"The federal mandate for corn ethanol is both unwise and unworkable," she said. "Roughly 40% of corn in the United States is currently used for fuel, which increases the price of food and animal feed while also damaging the environment. Additionally, oil companies are unable to blend more corn ethanol into gasoline without causing problems for some gas stations and older automobiles.

"This bill is a simple and smart modification of the Renewable Fuel Standard program. Once we remove the corn ethanol mandate, the RFS program can finally serve its intended purpose: to support the development of advanced, environmentally friendly biofuels like biodiesel, cellulosic ethanol and other revolutionary fuels."

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Comments

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melvin meister
1/22/2015 | 9:11 PM CST
To RJZ Imust apologize to you for not understanding the gist of your first letter .I travel to the Twin Cities often visiting 2 daughters and am thrilled to see the effort to promote ethanol.Yes my old trucks get 30%plus and E-85 in my car. Just read that the CENEX station in Alexandria Minn,is selling E-85 for $.85 per gal 85 cents;;;;That is possible with good RIN sales by their supplier.that is amazing. Thanks again for pointing out my error.
RJZ Peterson
1/22/2015 | 2:35 PM CST
Melvin, apparently you did not read the whole article above... according to the article above, the amendment is being brought to the table by both R's and D's. You and I seem to be mostly on the same side here, so don't be so quick to attack me. I am pro ethanol, I fill my pickup with E85 every chance I get. we have blender pumps in my home town so I burn mostly E85. I even run E85 in a couple of my antique tractors for parades to promote E85 for Minnesota Corn Growers Association. Corn ethanol may not be the perfect answer, but at least it is a start. I would hate to know how low the price of corn would get if we didn't use some of it for ethanol production... If the legislators remove the RFS completely, this new farm bill will pay out a huge amount of money due to the decrease in the price of corn. Some of these people, I bet, never thought of that.
melvin meister
1/21/2015 | 11:35 PM CST
RJZ you must listen news .when the argument is lost then we say they all do it D;s And R;s both so that makes you happy you dont have to come up with any facts.
RJZ Peterson
1/21/2015 | 2:02 PM CST
To all above... You cant simply blame the reduction in the RFS on the GOP. The fact is this country has been ran by the DFL for most of the past eight years, and the EPA is a cancerous tumor that is fed by the DFL. If the DFL is so environmentally friendly then why doesn't Obama keep his "Executive Order" pen fired up and solve this himself? My point is if you keep pointing fingers at the GOP for solely reducing the RFS you are surely headed nowhere. There are a lot of legislators in BIG OIL's pocket on both sides of the isle. if you feel the need to point fingers, point them at the individual, not the party. I can think of a lot of members of the GOP in favor of increasing Ethanol use, as well as a lot of DFL members who would like to see a reduction in corn ethanol use. Wake up and get your head out of your rear end!!!
GWL 61
1/21/2015 | 12:18 PM CST
To Melvin, The whines of a few does not make win for all. Ethanol's clear pitcher is as dark as a barrel of oil. I surely wouldn't wager my farms future based on the ethanol industry. Good Luck to you !
melvin meister
1/21/2015 | 11:48 AM CST
To GWL This engine is not in production since no car or truck mfg. has purchase the rights to it.Remember how long GM hung onto the old 350 engine. they are slow but the new mileage standards help. ND MINN> are way out in front of the Blender Pumps use. 36.5 MPG on my 2012 Malibu Flex Fuel car is not bad . Keep an open mind GWL The oil companies effort to keep ethanol out of the conu emers reach will astound you .Please stop badmouthing ethanol.
GWL 61
1/21/2015 | 8:37 AM CST
To Melvin, Where do I find this engine at a car dealership? I don't plan on driving in Indy. Fuel supply man doesn't want to mess with blender pumps, his E85 pump just sits with little use. The blender pumps success is based on consumer use and preference. The ethanol industry has not earned it's place in the market place with the vast majority of the American consumers. Dinneen's rhetoric has been the same for past decade. It might be time for new faces and new ideas on promoting ethanol, if it is to survive.
melvin meister
1/20/2015 | 11:21 PM CST
TO GWL THAT engine has been developed by Ricardo engines. look it up All Indy cars run on 100% ethanol. The ethanol industry asked and paid for this engine.Look it up; Ask your fuel supply man why he has not installed a Blender Pump .If you are a farmer Speak up
Jay Mcginnis
1/20/2015 | 12:08 PM CST
There is gain from ethanol, it won't save us from oil depletion and do little(but does some) for climate change. Where it will someday be important is at the point of its production, that being used to run agricultural equipment. Like electric vehicles more research needs to happen but there needs to be a demand for that. If the GOP takes out the RFS we lose the future fuels and big oil wins.
GWL 61
1/20/2015 | 8:55 AM CST
To Melvin, What about the future generations having access to abundant supply of fresh water. The continued tearing up of grassland, tiling potholes, excessive irrigation using more fertilizer and chemicals year after year. What will this effect be years down the road? I am not against ethanol. But I do believe it has reached it's peak as a beneficial form of energy. If its so great why doesn't the industry look at investing money in technology in producing an engine that uses ethanol more efficiently? Ethanol nor big oil seems to want that to happen. Price of gas down now, sales of gas guzzling pickups and SUV's up. We will never learn.
melvin meister
1/19/2015 | 9:36 PM CST
TO GWL you sound like this generation is the last one so just use it all up .Many future generations will need energy from many sources .Stop being Ethanol negative you may need it some day.
GWL 61
1/19/2015 | 6:20 AM CST
Just remember our existence and life as we know it, on this planet, makes us dependent on oil whether we like it or not. Only a fool liberal will see it otherwise.
Jay Mcginnis
1/18/2015 | 9:08 PM CST
The GOP is determined to return us to the good ol days of dirty air, dirty water, endless wars and CHEAP FOOD! The farmers that voted for the "Obama Haters" will find themselves struggling to pay off that "new paint" equipment and expensive land with $1.98 corn while the oil companies get rid of ethanol, Monsanto still charges the same for its products and ADM/Cargill get to handle record size crops! But hey, you missed GW Bush sooo much!!!!
Bonnie Dukowitz
1/18/2015 | 4:53 AM CST
Rfs has much more to it than ethanol. Carbon tax, huge tax benefits for the rich. Etc. Need to look at all parts of rfs. Renewable involves much more than corn.
melvin meister
1/16/2015 | 10:47 PM CST
Sorry GWL If you are sick and tired now wait until big oil gets it's way .You speak like a fool.
GWL 61
1/16/2015 | 3:29 PM CST
I'm sick and tired of this Dinneen and his broken record speech that he has on ethanol. Corn maybe less expensive today then it was in 07, Is he proud of that fact ? What about all the inflated cost of producing corn since 07. Who's going to keep planting corn at a loss ? The fact that gas is under 2 bucks, has little if anything to do with ethanol. The ethanol industry needs to come up with a better selling pitch, than what it has now, if it wants to survive. As something that benefits a few it has a long way to go to make its mark in this country as being beneficial to the vast majority of the consumers.